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Housing market: Down payments are going up for buyers

Yahoo Finance Video

Yahoo Finance’s Ronda Lee joins the Live show to discuss mortgage rates, the median down payment, and the outlook for the spring home-buying season.

Video transcript

[MUSIC PLAYING]

- Soaring home prices and low inventory are making this spring home buying season a rough one for homebuyers. Mortgage rates are the highest they've been in 13 years and home affordability is the worst it has been. Here to discuss what is hopefully a positive outlook for homebuyers is Yahoo Finance's senior reporter Rhonda Lee. And Rhonda I know you've been covering this space really closely. There's some interesting stats out there about how the buying has shifted, as we've seen rates tick up.

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RONDA LEE: Unfortunately, because there's low inventory home prices have gone up. And with the increase in home prices, means increases in down payments. So, unfortunately, no good news for homebuyers. The recent study by realtor.com showed that our homebuyers are putting about twice as much down as they were. So-- and I think in 2020 it was like the median average was $15,000, now it's $28,000. So homebuyers are going to be feeling the extra crunch.

- Now, Ronda, what's really interesting is that we've seen, kind of, a displacement, some movement around where people are living. So does that type of migration have any implications for specifically those in the urban areas? Are we actually seeing lower down payments in some metro areas?

RONDA LEE: Unfortunately, for people who were like, I'll just move to someplace that's not New York, Chicago, or LA, those other areas like El Paso and Augusta, because they're more affordable and we have people working from home, they're moving to those areas and they're bringing their New York dollars or their LA dollars. And so that means that those areas are also seeing a big increase. So where people were like I just stay away from Chicago and New York, you're still going to get the hit.

- Yeah, all right, so no reprieve anywhere really. But hopefully we can get some positive developments on home prices as the Fed starts to ratchet rates up. Yahoo Finance senior reporter Ronda Lee, thanks so much. Appreciate it.